European investors back funding of Mongolian solar plant

ImpactAlpha, May 16 – Mongolia, landlocked with a population of three million, is almost entirely dependent on imported fossil fuels: 80% of its power is coal-based, while only 3% comes from renewable sources. The country has an abundance of renewable resources: its sun and wind alone could be harnessed to generate a potential 15,000 terawatt-hours per year, according to a report from the International Renewable Energy Agency. The Mongolian government is aiming for 20% renewable domestic power generation by 2020 and 30% by 2030. International development agencies and private sector players are investing in the development of Mongolia’s renewables sector.

Biggest deal… Dutch development bank FMO, the European Bank for Reconstruction and Development (EBRD), and Triodos Investment Management are providing a €31.6 million ($37.5 million) loan to develop a 30-megawatt solar farm.

More solar… In 2016, Mongolia’s first commercial solar plant, developed by Sharp and Shigemitsu Shoji with financing from the Japan Bank for International Cooperation, began producing power.

The new solar farm, called Desert Solar Power One, will supply power to 27,000 households and be the country’s largest solar installation. The three investors are providing equal shares of financing. In 2012, FMO and the EBRD backed Mongolia’s first renewable power project: a 50-megawatt wind farm. The $120 million project was sponsored by French energy company ENGIE, German developer Ferrostaal, the Danish Climate Investment Fund and a local Mongolian entrepreneur.